Australia has been rated the costliest country for overseas higher education, according to a report by HSBC. The world's sixth largest country has surpassed the United States and Britain.

This report has thrown up a few surprises for international students as Britain was usually considered to be the costliest, in terms of both tuition and living expenses. When the economic crisis hit both Europe and the U.S., most of the higher educational institutions hiked tuition to compensate for state budget cuts and to increase their revenues. This move drove most of the foreign students away to supposedly less costly countries like Singapore, Hong Kong and Australia.

However, the findings of this report thwart all assumptions. Although, the average annual tuition fees for foreign students in Australia and the United States are approximately the same, about $25,000, the higher cost of living in Australia has placed the country on top of the list.

In Australia, foreign students need to shell out about $38,000 per year , whereas it costs about $35,000 in U.S. and $30,000 in Britain.

"While Australia has continued to enjoy higher economic growth than other western markets over the past five years, this has also led to a higher Australian dollar which has placed a strain on the price competitiveness of our export sectors, including education," said Graham Heunis, Head of Retail Banking and Wealth Management for HSBC in Australia.

"While Australia's education sector has taken a hit in terms of overseas student numbers, the proportion of international students in Australia remains strong, indicating many are looking past the cost impact to other factors such as quality of life and education and proximity to home. Having withstood the cost pressure of the high Australian dollar for the past three years, Australia's tertiary institutions could see international student numbers swing back with the falling Australian dollar," said Heunis.

HSBC arrived at the ratings after analysing public data in 13 countries. They combined average cost of university fees and living expenses to calculate the average costs per year for international students.  

The most affordable country among the 13 surveyed regions was Germany, with an average of $6,200 a year in tuition and living expenses. In Asia, Singapore and Hong Kong were the most expensive for international students, where students paid about $24,000 and $22,000 annually.

 "Even though the market for higher education remains segmented and therefore mispriced at an international level, the cost is going up everywhere as government subsidies are rolled back," said Malik Sarwar, HSBC's Global Head of Wealth Development.

Average annual cost of studying abroad for international students